Key takeaways
- SBA loans have rates capped at Prime plus a set spread and terms up to 10 years (25 for real estate).
- They take 30–60 days or more and require full documentation.
- Online term loans fund in days at a higher rate.
The trade-off: cost vs. time
SBA loans are partially guaranteed by the U.S. Small Business Administration, so lenders can offer long terms and rates capped at the Prime rate plus a set spread. The cost is time and paperwork: 30 to 60 days or more and a full financial package. Online term loans can fund in days with less documentation, at a higher rate.
Choose an SBA loan when
- You have 2+ years in business, good credit and solid financials
- The amount is large and the monthly payment matters most
- You are buying real estate, a business or major equipment
- You can wait several weeks for funding
Choose an online term loan when
- You need funds in days, not weeks
- Your business is younger or financials are less formal
- The opportunity's return justifies a higher rate
- You plan to refinance into cheaper debt later
A common strategy
Some businesses take a faster loan for an immediate opportunity, then refinance with an SBA loan once they have the documentation and history in place. Ask about prepayment terms before signing so refinancing stays an option.
Sources
BFG Funds is not a lender. We connect businesses with independent lenders and funding providers. Amounts, rates, terms and timing are set by each provider after its own review of your business (bank statements, revenue, time in business, credit profile and more) and are not guaranteed.